The real cost of switching to Linux

After years of experimentation with Linux in the enterprise, customers, analysts and suppliers are starting to agree on where Linux makes financial sense and where it does not.

Although Linux is often thought of as a free alternative to established operating systems such as Windows and proprietary Unix, is it really cheaper when you add the costs of acquisition, migration, operation, and support? In other words, is the TCO (total cost of ownership) of Linux really lower than that of Unix or Windows?

The simple answer is this: The more fully a company adopts Linux across its infrastructure, the more financial benefit it is likely to get out of up front investments in the OS. Those investments, which can be considerable, include Linux training and tools, and the costs of migrating from a Unix or Windows environment.

Financial advantage is improving steadily as better management tools, more third-party vendor support, and more skilled Linux system administrators arrive on the market.

But the cost and benefit of switching are not equal for everyone. Unix-to-Linux migrations typically make financial sense because retraining costs are minimal while hardware acquisition costs drop significantly.

In greenfield situations or for companies running a mish-mash of OSes, Linux can be a total financial no-brainer. But Windows-to-Linux migrations are more of a toss-up because of higher retraining and conversion costs, and lower hardware acquisition cost savings.

ROI or TCO?

Figuring out the TCO of Linux is not for the faint of heart. Several IT executives have admitted they skipped the exercise because the model would have been very complex, with too many unknowns and assumptions.

Laef Olson, an economist by training, decided to build a TCO model. "I just sat down with a blank spreadsheet and started making assumptions," says Olson, now the vice president of technology for UIS-based website Cars.com.

"Annual traffic growth. What do I pay for web server CPUs? How many sys admins do I need per physical machine, and where will tools discount that down the road?"

Olson calculates that migrating to Linux would yield "a seven-figure savings" for Cars.com over a four-year period, assuming 20% to 25% annual traffic growth and a cost of capital (which he declined to reveal). But he notes that his model contained a few big "ifs," such as the availability of Linux OS support from key third-party vendors. "A lot of it has to do with where you think the industry is going," he explains.

Another important question is whether to focus on TCO or ROI when evaluating Linux. Most industry studies have focused on TCO -- the all-inclusive costs of running specific workloads such as web serving, file and print, and security applications. But that is changing. US-based analyst organisation Robert Frances Group this year switched from doing Linux TCO analysis to ROI analysis.

"TCO doesn't examine what you could save, what flexibility it will provide you, how much money you could make," explains Chad Robinson, a senior analyst at the Robert Frances Group. "Those are the reasons you deploy something."

Moreover, adopting Linux usually includes one-time, up front migration costs such as retraining and application integration, costs that are included in TCO but can only really be evaluated by looking at ROI.

"If TCO triples but ROI doubles then it should be deployed. You end up saving in the long run," Robinson explains.

No matter which model you use, the financial benefit of switching to Linux from Unix or Windows is driven by four main cost categories: acquisition, migration, management and support. Here are highlights of key issues in each of these areas.

Hardware and software costs

The benefit of replacing expensive RISC processor-based Unix hardware with commodity Intel boxes is one of the biggest factors driving Linux adoption.

It's an easy calculation. "Moving Unix workloads to Linux is a no-brainer because of the Intel economics," says Ted Schadler, principal analyst at Forrester Research. "If you look at the all-in cost of deploying Unix on RISC versus that same workload on an HP or Dell box, it's between a 5K (dollars) and 25K price improvement."

On the software side, the cost differential is less clear. Studies by IDC, Meta Group, and Robert Frances Group find that Linux licence costs are lower than those of Windows. But some analysts argue that this is not a fair comparison. "When you're building apps," notes Forrester's Schadler, "it's not a Windows versus Linux decision. It's a Java-on-Linux versus Windows decision. Microsoft bundles a lot of stuff into Windows, into SQL Server, into the .Net framework - if you're looking to build a generic app and deploy it at an all-in price point, Windows is going to win hands down because you get so much bundled in."

On both the hardware and software side, an often overlooked cost advantage of Linux is the flexibility it provides in terms of future migration and upgrade paths. "With Linux, you control your own upgrade cycle," Robinson says.

Migration costs

When contemplating a move from Unix or Windows to Linux, companies should take a hard look at the one-time migration costs. One of the biggest expenses is training systems administrators to get up to speed on Linux.

"It's a gross generalisation, but if you talk to someone in their 20s, they know Linux; in their 30s, they know Microsoft; in their 40s, Unix; in their 50s, big systems like VMS (Virtual Memory System)."

So in theory, Lyford says, you could gauge your Linux migration costs by figuring out the average age of your system administrators.

In reality, Unix skills are closer to Linux skills, which lowers the cost of migrating from Unix to Linux. "If you're a pure NT shop, and you don't have any Linux skills, then the barrier is a heck of a lot higher," Lyford says. "All the Unix people instantly get Linux."

Those with Unix skills who don't catch on right away can easily download and try it at home, Lyford notes.

The ability to download Linux freely also makes it easier to prototype potential deployments, a gap which Microsoft is aiming to equalise.

"I need to make it easier for people to try to do things on my stuff, to try to build a scenario or an environment," says Martin Taylor, Microsoft's general manager of platform strategy .

"One of the issues that causes people to not take a full picture on [Linux costs]) is they download something for free and they invest time to get it where they want it. They don't fully account for the time and effort it took to even get their model scenario running."

Other migration costs include code that may have to be rewritten, data that must be migrated, integration work to back-end systems, and software that must be purchased to replicate a capability that already exists on the platform Linux is displacing.

"There were a lot of costs I didn't expect - hidden migration costs," says Cedars-Sinai's Duncan. During the migration from NT to Linux, his staff insisted that because they had been running RAID disk mirroring and striping on NT they should buy SCSI RAID controllers for the Linux servers. "It was like $1,000 per box extra that I hadn't planned on."

One-time migration costs will be lower if your application already runs on top of middleware that will easily port to Linux, such as an application server.

"Modern development practices and cycles are helping reduce the migration cost," Robinson notes.

Management costs

By far the biggest cost in most Linux TCO studies is the staffing required for operational systems management. In a 2002 Windows vs. Linux study produced by IDC (and sponsored by Microsoft), staffing accounted for 62% of the total five-year cost for both environments. It also made up the biggest cost difference between the two, with Windows coming out ahead at a slightly lower cost.

Although most analysts believe Windows administrators cost less than Linux systems admins, the real debate centres around the cost benefits of consolidation, and the availability and quality of management software tools for the Linux platform.

"The operational savings vary wildly," says Dave Dargo, vice president of Oracle's Linux Program Office. "Customers who simply adopt Linux side by side with their other OSes probably won't see savings."

He makes the consolidation argument: If you move wholesale to Linux and buy or build robust management tools, you can save more with Linux than with proprietary Unix or Windows because Linux management tools and personnel skills can be spread across a wider target (servers, mainframes and desktops). Because Linux developers have unfettered access to the Linux OS, fewer administrators are needed to manage more machines and greater workloads.

The only problem with this scenario for large Unix shops, says DuWayne Mutchler, director of enterprise hosting at EDS, is that some of those tools don't exist. "The argument that Linux is cheaper to operate is one we struggle with," Mutchler says. "The tools and processes and the automation capabilities have not evolved as far as they have for Unix, so we're finding zero cost savings in moving to Linux." Of EDS's 50,000 servers, less than 2% are running Linux.

Cedars-Sinai's Duncan has also found some key cost-saving tools missing, although he's generally happy with his organisation's migration to Linux.

"Backups have been a nagging problem," says Duncan, who notes that the medical centre had been using a hot backup agent for Oracle databases on AIX and NT as part of IBM's Tivoli Storage Manager, but that this agent was not yet available for Linux.

"That is kind of annoying that we can't use our standard backup methodology on Linux yet."

Duncan also found that San support for servers could be problematic.

One management cost area where Linux seems to trump Windows consistently is the cost of managing security. A big driver for Cedars-Sinai's switch to Linux was "the tremendous amount of churn we have on our NT servers" because of hot fixes, service packs, and so on, Duncan says.

"We did an analysis of the amount of time we were spending tweaking NT servers, and it really was kind of terrifying. We should be able to set up a server and just leave it alone - we really got into Linux from that point of view."

Support costs

The final major cost item in the debate over Linux TCO is support. Linux proponents claim Linux support is cheaper and available from a more diverse supplier population, and that Linux machines often run for years without so much as a reboot.

"Sun provides fantastic support on their equipment, and you pay dearly for it," says Cars.com's Olson. But when one of his new Linux machines breaks down, his staff either replace it because that approach is cheaper than a fix, or they turn to what he calls "Google service," looking on web newsgroups and message boards for the solution. "People are willing to share their experiences. You can find out a lot quickly."

Organisations are overcoming their initial suspicion of this support method. "Early on, Linux support was an inhibitor to enterprise adoptions," says Robinson. "Now it's turning into a strong point."

Users can choose support from their hardware or software vendor, distribution vendor, or a third party. "That's possible with Windows, but with the Microsoft solution, providers can't actually make a change to Windows for you," Robinson says. "All of the Linux support vendors are equally empowered."

Other cost contingencies

Although it is a factor hard to put into a spreadsheet, existing and potential Linux users are also concerned about future cost risks associated with Linux's ownership and development path. Some worry about how the SCO lawsuit will play out. SCO claims that Linux infringes on its intellectual property and is trying to collect licence fees from enterprise Linux users.

Although few expect the outcome of this controversy to have an impact on Linux TCO, the surrounding uncertainty is affecting how some companies might time their adoption of Linux.

Others are also concerned that the Linux upgrade path will fragment as suppliers develop proprietary flavours.

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